WILL REAL ESTATE PRICES DROP AFTER THE WORLD CUP™?

Khaldoun Abo Rayed
CEO
Ideal Home Real Estate

There is no doubt that real estate prices in Qatar are some of the most highly priced units in the world, and therefore considered to be stable and secure. This is due to several reasons that we will unveil through this article. This state of stability accompanying the market gained the trust of many regional and foreign investors, which has boosted the investment attraction globally during the last decade.

The Qatari real estate market, as is the case in all markets, has been affected by many global, regional, political and financial factors whose results are reflected in an increase or decrease in real estate prices. However, it still has distinct privacy in terms of the high solvency of real estate owners, which is something that I will discuss later in this article.

Based on these variables, the real estate market has recently witnessed a rapid growth and an increase in its prices (sale and rent) by no less than 20 percent between 2020 and 2022. After the world recovered from the COVID-19 pandemic and the negative effects it caused on all sectors, the most important thing is the proximity of the largest global event to take place in Qatar – the 2022 World Cup™.

Here, it is necessary to ask what will the prices turn out to be after the end of the World Cup™? Will the increase be lasting or temporary? Will the real estate market remain a safe haven for investors with a guarantee of at least 90% of the capital?

Through our review of the countries that hosted the World Cup™ tournaments over the past decade, from South Africa, Brazil and Russia, we can see that the real estate sector declined in South Africa and Brazil at a lower rate and grew in Russia, where the Russian real estate market achieved exponential growth. More importantly, real estate boomed in the Russian cities that hosted the matches, while the cities where there were no events had not been affected or showed signs of decline. Here, the small area of Qatar plays a supporting factor, as the events will be almost in all Qatari cities.

The reason for this is mainly due to the facilities granted to foreign investors and Gulf investors in particular, in order to attract them to invest and develop various fields, and this thus leads to the improvement of all sectors, including real estate. From here, we see that to the extent that new projects are being proposed related to Qatar Vision 2030 and through the attraction of all investors and highlighting Qatar during the coming period, all sectors will witness distinct qualitative leaps, including real estate, where the real estate sector continues to rise or stabilise.

There remains an important point that must be mentioned, which is the distinguished financial solvency benefit by Qatari real estate owners, who constitute the largest percentage of owners (exceeding 75%), which allows them to maintain prices and curb their descent without affecting the general market, as, during crises that passed in 2008 or the Corona pandemic, we saw the effectiveness of this sheet in protecting the market, which made the property against the righteous son of all kinds of investors who are looking for a safe investment with an investment return ranging from 6 to 8 percent.

In conclusion, we must ask again, will the prices drop after the World Cup™? In our humble opinion, after the World Cup™, we will go through a phase of price stability, so that the real estate market will rise again thanks to the projects that will be put forward to achieve Qatar Vision 2030.

This article was published as part of the eighth edition of Property Finder Qatar’s Trends Report.